Wireless Service From These Cable Guys Is on the Way

Almost five years ago, Comcast Cable president Neil Smit hailed a deal with Verizon that would “enable us to execute a comprehensive, long-term wireless strategy.” He wasn’t kidding about the long-term part.

On Tuesday, Comcast CEO Brian Roberts disclosed that after years of dithering, his company’s wireless play was finally ready for prime time—almost. The new service will launch “somewhere in the middle of next year, maybe a little sooner, but not at the beginning of next year,” Roberts said at the Goldman Sachs Communacopia investor conference in New York on Tuesday. Using leased airwaves from Verizon’s network combined with access to Comcast’s 15 million Wi-Fi locations, the service will be pitched at Comcast customers who already buy multiple services, Roberts said.

About 70% to 80% of Comcast’s 28 million customers buy a bundle of two or mores services, he explained. With wireless, “we can sell them more products,” he said. And with a bundled offering, Comcast might be able to undercut Verizon and other wireless carriers on pricing, he hinted. The new service will be able “to give you a good value proposition if you’re one of our better customers,” Roberts said.

The delays may have made Comcast’s cmcsa task that much tougher, although it has used the time to massively expand its Wi-Fi network.

A lot has changed in the wireless market over the past five years. Back at the end of 2011, Verizon vz and AT&Tt looked healthy, but smaller competitors Sprint s and T-Mobile tmus were hemorrhaging customers and profits. Today, energized under new CEOs, Sprint and T-Mobile have roared back to life as significant competitors. At the same time, wireless service revenue growth for the entire industry slowed to 2% last year from 6% in 2011—in part because most customers now buy their phone outright instead of getting subsidies.

But just because competition has increased and growth has slowed doesn’t mean Comcast’s wireless effort is doomed. In fact, the millions of Wi-Fi access points and the company’s extensive wired, cable footprint could give Comcast an advantage. The big four carriers are trying to improve their networks by adding tens of thousands of smaller wireless cells—each of which needs to be connected back to the wired network at some point. And the next generation of wireless technology, known as 5G, doesn’t travel far and will need even more cells and wired connections.

“If the advantage in wireless will increasingly come from wires, then the companies best positioned to deliver the next generation of wireless services are…wait for it…cable operators,” observed Craig Moffett, a long-time industry analyst at MoffettNathanson Research, over the summer.

Now, with Comcast’s announcement, Moffett says he thinks Charter Communicationschtr could also enter the wireless business as it is a party to the same 2011 deal with Verizon through its acquisition of Time Warner Cable and Bright House Networks.

Selling customers a combination of communications services as those services increasing overlap could be a winning offering, Moffett said on Tuesday.

“The lines between wired and wireless networks are blurring,” he says. “For Comcast and Charter, being a wireless operator isn’t optional. All network operators are going to be in the wireless business whether they like it or not.”

For more on Brian Roberts’ views on media, watch:

Some analysts are more skeptical about Comcast’s strategy of relying on Wi-Fi and filling in the gaps with Verizon. If Comcast customers spend too much time using Verizon’s airwaves, the costs will add up quickly for Comcast. Wi-Fi first mobile carriers have succeeded to some degree in other parts of the world, but the expansive sprawl of U.S. suburban and rural areas has posed a challenge for carriers relying on Wi-Fi here.

“The wireless industry is structurally different than Europe, where WiFi First strategies have had success,” said Walter Piecyk, an analyst at BTIG Research.

Still, new services from Comcast or other cable companies will likely hurt the big four wireless carriers, according to Jonathan Chaplin, an analyst at New Street Research.

“Verizon and AT&T have the most subs to lose, but Sprint and (T-Mobile) would suffer the greatest loss to equity value due to greater financial leverage and a lack of other businesses to cushion the blow,” Chaplin wrote in a report on Tuesday. However, T-Mobile “is somewhat insulated because Cable entry significantly raises the prospect of them being acquired.”

Comcast CEO Sees Lots of Competition Where Others Don’t

For a guy who runs one of the closest things to an outright monopoly service in the country, Comcast CEO Brian Roberts sure sees a lot of competition. But he doesn’t sound eager to provide much new competition in a few areas that could really benefit.

“Do we need more regulation in this competitive, super technologically changing world that we’re living in?” he quipped to reporters on Monday at a cable industry conference in Boston when asked about a government effort to enliven the market for set top boxes. “We feel competitive pressure every minute.”

“We’re assuming the world is going to get more competitive,” he added a few minutes later.

But asked whether Comcast cmsca had any interest in moving outside its tight patchwork of service regions across the country, suddenly Roberts wasn’t much interested in competing. “We don’t have any plans to do that,” he said. “The reason is we have a clear value add in market.”

That “value add”? Comcast’s fleet of 35,000 repair trucks, Wi-Fi coverage, and call centers, Roberts said. Left unmentioned, of course, was the cost of building new infrastructure to compete in one of his peer’s near-monopoly backyard. “If something is working, I’m not sure you need to change it,” he concluded.

And what about the cable industry’s never-quite-ready effort to mount a challenge to the wireless industry by offering an alternative mobile phone and data service, one that might rely heavily on wifi to keep prices down? Sounds like Roberts isn’t eager to take on that competition anymore.

“What is it we would do in wireless that’s different than others? My answer’s going to be stay tuned,” he told reporters. “If we can’t figure that out, probably we’ll stick with what we’ve got. If we do, we’ll have something to talk about in the future.”

Its been almost five years since SpectrumCo, the joint venture between Comcast, Time Warner Cable, and Bright House Networks, sold its airwave licenses to Verizonvz in return for cash and the rights to resell wireless service. If they haven’t figured out how to crack the business by now, there may not be much hope for consumers eager for a new mobile alternative.

But there’s a pretty simple reason why Roberts is talking up all the competition, while offering to provide very little. Federal regulators have been giving the cable industry in general, and Roberts in particular, a pretty hard time.

It wasn’t enough that the Justice Department killed his planned $55 billion takeover of Time Warner Cable last year. But then the Federal Communications Commission also went ahead and imposed net neutrality rules that blocked Comcast and other broadband providers from discriminating against third-party Internet sites and services. And in February came the FCC’s preliminary set top box rules that could allow consumers to connect almost any kind of box they wanted, threatening $20 billion of steady cable industry revenue from box rentals.

The cable industry is already fighting the net neutrality rules in court and looks likely to sue to block the set top box rule when it becomes final, as well. So Roberts is just setting the stage: There’s plenty of competition where regulators see little and no need for more where consumers could really use it.

You Can Now Get Comcast TV and Internet Service Through Amazon

The media conglomerate has begun selling its Xfinity TV, phone, and Internet services through Amazon amzn. Comcast’s cmcsa service bundles are available through Amazon.com’s recently debuted Amazon Cable Store, a web page whose existence was first reported on Sunday by the television news outlets TV Predictions.

Comcast customers have long complained about the company’s shoddy customer service. “We’re improving dramatically, but we can always do better,” said Brian Roberts, CEO of Comcast, at Fortune’s Global Forum conference this year. Now the company is tapping Amazon’s expertise to make its online sales and support interactions smoother.

“They helped us in our thinking about how to simplify the experience and just make it clean,” said Neil Smit, president of Comcast’s cable division, in an interview with the Wall Street Journal—for instance, by minimizing the number of clicks per transaction. “We’re partnering with a company that’s so good at the customer experience—I think that’s really what excites me.”

For more on Comcast, watch:

The two companies struck the deal over the course of a year following a discussion Roberts and Smit had with Jeff Bezos, CEO of Amazon, the Journalreports. The terms dictate that Amazon will take an undisclosed cut of each new subscriber sale, according to the Journal, which cites an unnamed source familiar with the deal.

For customers, the prices offered through the new sales channel and existing ones will remain the same, Comcast said.

The dust has settled from Comcast’s failed bid for Time Warner Cable. But Comcast’s core business—selling bundled packages of television, Internet and phone connectivity to consumers and businesses—is still facing disruption. But the pressures haven’t kept the company from growing. In fact, its last quarterly earnings report showed that the number of overall customer “relationships” increased 156,000, a 90% improvement from the same period last year.

“It was our best video quarter in nine years,” Brian Roberts, CEO of Comcast, told the audience at Fortune‘s Global Forum during an on-stage conversation about the shifting media industry.

Comcast has been bleeding customers on the video side, but managed to significantly slow the losses in this most recent quarter (and, importantly, increase its overall revenue per customer 4.3% in the same time period). And it is adding customers in its high-speed Internet business. In this most recent quarter, their ranks increased 320,000 while revenue grew 10.2%.

What’s driving the growth? It’s at least partly due to new products, according to Roberts. About a quarter of video customers now have its X1 Internet-enabled television platform.

“Every quarter we try to have new product,” Roberts said. To help come up with those products, Comcast CMCSA now employs 1,500 software engineers. The company is building a new technology center and also has a presence in Silicon Valley.

But while it has developed new products and managed to squeeze more money out of customers, the competition has also increased.

“There’s a lot of competition—satellite, telcos and cord-cutting,” said Roberts. There is also a generational change: younger people are increasingly cutting the cord, a.k.a. disconnecting cable TV and getting their video content from the likes of Netflix and Amazon. “You’d be foolish not to embrace it [the generational shift],” said Roberts, who pointed to recent acquisitions like new media companies BuzzFeed and Vox.

But Comcast’s biggest threat, quite possibly, remains itself.

“We’ve been making steady improvements,” Roberts said of the company’s notorious customer service snafus. “You’ve got to show up on time and it has to be reliable.”

Comcast has been innovating on the customer experience side as well. One new feature is automatically crediting customers if a technician shows up late. “We’re improving dramatically, but we can always do better.”

How Comcast lost friends, its influence, and the bid for Time Warner Cable

“Life is like a box of chocolates,” Brian Roberts tells the crowd. Avuncular and bespectacled, the 55-year-old CEO looks like he might begin dispensing some homespun Hollywood wisdom any second now to the cable-industry folk gathered in Chicago’s McCormick Place convention center in early May. But he is demonstrating a cool new piece of technology instead: a voice-activated remote designed for Comcast’s CMCSA Internet-connected set-top box, the X1. The moment he says the words aloud, a scene from the movie Forrest Gump pops onto the twin oversize screens on either side of him. The Siri-like remote, says the clearly tickled CEO, is capable of understanding some 3 million voice commands, from asking a movie star’s age to finding a specific scene in a favorite movie—to breaking the ice, it seems.

“Show me the Comcast–Time Warner Cable merger,” he says. Suddenly Vin Diesel is onscreen. His Fast and the Furious character shouts for someone to “Get down!”—then a house explodes. The audience erupts in laughter.

“We’re moving on” is a phrase that Roberts has been saying a lot lately. He said it the day before, when Comcast announced its blowout first-quarter earnings (a 10% rise, to $2.06 billion), and he said it on April 24, when the company walked away from its failed $45 billion bid for TWC TWC. It’s no wonder why. The experience was a traumatic one for the company—or should have been.

Brian Roberts Chairman and CEO of ComcastPhotograph by Aaron Sprecher—AP

It wasn’t just that the merger fizzled. Lots of proposed unions don’t end up being consummated. It was how it failed. The deal’s demise and the years leading up to it present a case study in corporate solipsism. Comcast, say many, has long acted like the company that never needed anybody—seeming to alienate networks on its cable system, Silicon Valley partners, and countless numbers of its own customers—to the point where it found itself with few allies when the merger was being reviewed. The Philadelphia company, indeed, might offer a rare lesson in whether having a reputation for good corporate community-ship actually matters in today’s hypercompetitive world.

More than two dozen interviews with industry insiders and a trail of government filings reveal a striking array of parties that were apparently hostile to both Comcast itself and to its proposed coupling with TWC—from programmers like the Tennis Channel to Netflix NFLX, whose CEO at one point told investors his main goal was to squelch the Comcast merger. Joining the ad hoc army against the deal were organizations as varied as Dish Network DISH; the Writers Guild of America, West; and a fan site called the Harry Potter Alliance. So broad was the coalition that it made bedfellows of Tea Party TV talker Glenn Beck and über-liberal Minnesota Senator Al Franken.

Senior Executive Vice President of Comcast David L. CohenPhotograph by Charley Gallay—WireImage/Getty Images

“I was a little lonely at first,” Franken tells Fortune. “But then others started stepping out. In the end, when word got out that things were turning against the deal, it all accelerated.”

The movement to stop the merger gained momentum in the final weeks of the government’s evaluation as more and more people and companies—even entire municipalities, such as the town of Moultonborough, N.H.—stepped forward to voice their opposition. In all, an unprecedented 300,800 comments were filed with the Federal Communications Commission, which with the Justice Department was one of the two government bodies tasked with evaluating the proposed merger’s effect on consumers and competition. The vast majority of comments were against the deal. By contrast, AT&T’s T proposed merger with T-Mobile TMUS in 2011 elicited 40,526 comments before the parties abandoned the idea.

As it happens, Roberts couldn’t have picked a better movie scene in his Chicago talk to capture the deal’s implosion: It was fast and furious.

When the notion of combining America’s No. 1 and No. 2 cable providers was first proposed on the day before Valentine’s in 2014, a number of politicians and nonprofit groups wrote letters of support to the FCC. Many extolled Comcast’s Internet Essentials program, which offers discounted connectivity to lower-income families and schools. A combined Comcast-TWC, they said, could extend these benefits to even more regions. But even such lofty goals seemed to pale in the face of an army of angry cable and broadband subscribers.

Comcast’s customer-service snafus were so legendary that they’d become a national meme, turning the more epic conversations with its customer-service reps into viral web phenoms and launching countless blogs and message boards devoted to cathartic tirades about the company’s service. Comcast is one of only two brands to have “won” the “Worst Company in America” title twice from the Consumerist, a blog owned by Consumer Reports. (Comcast took the low honors in 2010 and again in 2014.) For the past several years the Philadelphia company has also ranked near the very bottom of the American Consumer Satisfaction Index, an annual ranking of organizations across 43 industries. The latest report of the index placed Comcast’s Xfinity Internet service 234th out of 236 companies, below airlines like U.S. Airways AAL and United and even the Internal Revenue Service. To be sure, Comcast’s peers don’t fare much better; Charter Communications, Time Warner Cable, and other providers typically rank near the bottom of such surveys.

“You get some jockeying for positions, but for the most part these companies really don’t move,” says David VanAmburg, managing director of the ACSI survey. Customers generally can’t do anything about it, he points out, because there are often so few alternatives—or in some cases just none.

Still, knowledgeable sources say, while consumers’ overwhelming disapproval of the deal carried substantial weight with regulators, legions of corporate interests probably played an equal one. As numerous and prolific FCC filings show, these foes didn’t spare words (and legal resources) in arguing the ways the deal could thwart competition—and the ways they believed Comcast had already unfairly harmed its rivals.

For years Comcast has been embroiled in litigation and high-profile disputes with a dizzying list of cable programmers, including Discovery Communications, the NFL Network, and a Spanish-language station named Estrella TV, among others. Most of the disagreements have been over carriage-fee negotiations (the money Comcast pays the networks in exchange for the right to transmit their channels to cable TV subscribers). Some have also been squabbles over placement, or where each channel will be positioned—a determining factor in their ratings and advertising revenue. In 2010 an independent sports network called the Tennis Channel filed a complaint with the FCC, alleging discrimination. Comcast, claimed the Tennis Channel, had placed its channel in a sports tier available only to customers who pay an additional fee while at the same time giving the cable company’s affiliated sports networks preferential treatment in a much more popular channel lineup.

The FCC agreed with the Tennis Channel, ordering Comcast to pay a fine to the network and to give it equal placement. Comcast appealed and won. The D.C. Circuit Court of Appeals overturned the FCC’s decision, concluding that there was insufficient proof of discrimination. But Comcast’s victory would come back to bite it. When the Comcast-TWC deal emerged, the FCC sought out the Tennis Channel for its take on how such a merger could impact consumers. “[FCC chairman] Tom Wheeler really got his teeth into this,” says Ken Solomon, CEO of the Tennis Channel, “and he quickly realized how tough these guys had been on all of us and how hard it was going to be to impose any conditions on a company like Comcast.” (A spokeswoman for Comcast asserts that the company has never discriminated against any channel.)

Glenn Beck, the conservative creator of independent network TheBlaze, also made his voice heard, even asking his viewers to write to the FCC in opposition to the deal. “I believe that businesses should operate free of government intervention,” Beck wrote on his website when the merger debate was still in full force. “But these companies are government-sanctioned monopolies with the power to silence independent, competitive voices like TheBlaze if it furthers their business interests.”

Other larger channel sellers, such as the Walt Disney Co. DIS and 21st Century Fox FOX , didn’t publicly oppose the merger but met with regulators to try to persuade them to block the deal, sources tell Fortune. Comcast, meanwhile, countered that many of these critics were self-serving. In a December filing with the FCC, the company called out a few specific channels for “attempting to leverage the transaction-review process to obtain higher fees and terms they could not reasonably expect in the competitive marketplace—which would ultimately raise rates for consumers.”

By the time this filing was issued, the coalition against the Comcast merger was in full swing. One of the most outspoken critics of the deal, satellite-TV provider Dish Network, sent the FCC a 266-page affidavit outlining 53 ways that a combined Comcast-TWC could “sabotage” competition. (The filing was one of nearly 70 submitted by the company over the course of the merger-evaluation process.) The myriad accusations and apprehensions mainly boiled down to this: Comcast had already shown it had the capacity and the incentive to discriminate against its competitors, Dish argued; allowing it to merge with TWC would only give it more power to squeeze out others in the industry.

As regulators evaluated the Comcast-TWC deal, consumers took to the FCC’s site—and good old grass-roots activism—to protest the merger. Photograph by Tom Mihalek—Reuters/Corbis

“We know that no one ever seizes power with the intention of relinquishing it,” began Dish’s lengthy December filing, quoting directly from George Orwell’s dystopian novel, 1984. Further down in the document, the company again borrowed from pop culture to make its repetitive point: “Comcast is almost like the Hotel California of broadband, an establishment guests can check into but never leave.”

Comcast issued a lengthy reply, forcefully denying Dish’s allegations and accusing the satellite network of “blatantly seeking protection from the forces of fair competition that would benefit consumers.”

But the fact is, customers often do find themselves “locked” into Comcast because of a lack of alternatives for broadband service. While there is an explosion of video-watching options on the market, an estimated 61% of U.S. households still have just one or no high-speed ISP servicing their region. This lack of choice doesn’t just affect consumers. Even as companies like Dish—more specifically, its streaming service Sling TV—represent a direct challenge to the traditional cable model, they also depend on its proprietary pipes to seamlessly deliver their products to consumers.

Scads of companies rely on those pipes. But none more so than Netflix, whose streaming-only shows hog an extraordinary one-third of Internet traffic. For weeks Netflix had been publicly feuding with Comcast over the broadband speeds the former was getting over the latter’s network. The “he said/she said” details over who allegedly did what to whom are difficult to sort out. (We tried, but couldn’t.) The one thing that was clear, however, was that legions of customers complained that their episodes of House of Cards were disrupted midstream. The accusations flew every which way until at last, on Feb. 23—10 days after Comcast announced its bid to merge with TWC—the parties came to an agreement that both sides called “mutually beneficial.”

But the truce was fleeting. Just a few weeks later Netflix was publicly lambasting Comcast again. Netflix claimed in filings with the FCC that it was essentially bullied into signing the agreement with Comcast; the cable giant, in turn, called that claim preposterous. (Cue more he said/she said here.)

There was irony to all of it: Netflix, with its more than 57 million customers, painted itself as the Silicon Valley underdog and defender of the web’s egalitarian ethos—and Comcast as the greedy gatekeeper of the Internet. Neither image reflected the pure truth, but it sort of didn’t matter. Comcast’s reputation was already so bloodied that it was easy for the House of Cards–loving masses to think the cable giant was guilty of any number of high crimes and misdemeanors.

Comcast began as a 1,200-subscriber cable provider in Tupelo, Miss. Brian Roberts’s father, Ralph Roberts, now 95 and Comcast’s chairman emeritus, acquired the operator in 1963 and started growing it. The company gobbled up other mom-and-pop providers and then increasingly larger mouthfuls of mega-operators. By 2002, when the younger Roberts took over as chief executive, the company was bringing in $12 billion in annual revenue and had grown to dominate an expansive geographic area that included key markets like Atlanta, San Francisco, and its corporate home, Philadelphia. It had also entered the fledgling Internet business via a 2001 buyout of AT&T’s broadband division. But its new leader would propel the company into an era of even more explosive growth, attempting larger and larger acquisitions, like its failed 2004 bid for Disney, a $54 billion deal that would have made it the largest media company in the world, and then the successful $18 billion purchase of NBCUniversal in 2011.

For years the company’s strategy of buying up smaller cable providers was a nearly perfect formula for growth. Its appetite for other cable operators went virtually unchallenged, ironically because of the monopolistic nature of the industry. (Since each provider dominates different geographic regions, providers don’t actually compete with one another, which under antitrust law means that allowing two large players to combine forces doesn’t thwart competition.) Add in the millions of dollars Comcast poured into Washington via lobbying and political donations, and the cable giant was all the more formidable.

With more than 100 lobbyists in D.C. (10 are in-house, the rest are contractors), Comcast runs one of the largest and priciest lobbying apparatuses. In the first quarter of 2015 the company reported $4.7 million in such spending, making it the second-most-generous corporate lobbyist, according to the Center for Responsive Politics. (Search giant Google came in first, with $5.5 million.) Comcast’s spending has only grown over the years: In 2014 it shelled out a total of $17 million on lobbying efforts, representing a sevenfold increase since Roberts took over in 2002.

Comcast didn’t have just the money; it had power relationships too. While Roberts’s chumminess with the current administration has been well-documented (Google this: President Barack Obama, Brian Roberts, Martha’s Vineyard), the company’s real point person in D.C. has long been executive vice president David Cohen, a onetime chief of staff to Ed Rendell when Rendell was mayor of Philadelphia.

According to a person close to the company, Roberts once shared with a roomful of executives a favorite story about Cohen: Back in 2000 both men were part of a nonpartisan committee trying to woo the Republican National Convention to Philadelphia. One day, as Roberts was on his way to give an important pitch to the party, he hit a nasty traffic jam. Desperate, he called Cohen, who was already at the meeting destination—and, as it happens, sitting beside the police chief. The chief quickly had a patrol car weave its way through the congested freeway and then escort Roberts with a motorcade to the meeting. The city of Philadelphia ended up landing the convention, which was held at the Comcast-owned First Union Center and televised on the company’s cable network. The same year Roberts became CEO, Cohen—who, as an outside attorney, had already worked on Comcast matters—was brought into the company fold.

Perhaps no episode quite captures Cohen’s high-profile network like the 2013 event he held in his suburban Philadelphia home to raise money for Democratic Senate candidates. There, President Obama joked, “The only thing I haven’t done in this house is have seder dinner.”

But by 2014 it was clear that even friendships with POTUS had their limits.

As regulatory bodies were mulling the Comcast-TWC merger, another critical issue emerged: the FCC’s controversial net-neutrality proposal. The idea that all online content should be treated equally (and that Internet service providers like Comcast be subject to more regulation) pitted technology companies and consumer groups against Comcast and its ISP peers. President Obama, meanwhile, sided with the net-neutrality camp, urging the FCC to craft the “strongest possible rules” governing Internet providers. Comcast soon issued a statement calling the President’s policy directive “a radical reversal that would harm investment and innovation,” adding that “such a radical reversal of consistent contrary precedent should be taken up by the Congress,” not left up to administration regulators.

Later, Comcast would be more publicly supportive of net neutrality—and of the new rules passed in February 2015. But there was a logical extension of that neutrality philosophy that conflicted, at least a bit, with the rationale behind its TWC merger.

One might assume that the approval of the new Internet rules would have helped Comcast’s case—as a more regulated body, it would now have the proper safeguards imposed on it, minimizing the risk that it would infringe upon the open Internet in any way. But the very vocal debate leading up to the decision—which at one point even caused the FCC’s aging website to crash—had the opposite effect on the companies’ bid to become one. All of a sudden, people across the country were acutely aware of who controlled their pipes and developed strong feelings about putting too much power into the hands of one gatekeeper.

After all, why would the government promote an open Internet and then turn around and consolidate more than 50% of the country’s broadband subscriptions under a single company?

It was a question that both Democrats and Republicans in Congress were increasingly asking. GOP lawmakers, in particular, might have been more inclined to oppose any heavy-handed regulation but were conflicted about greenlighting any deal that could limit the competitiveness of any market. “In almost every place a cable company operates, they operate with a tremendous amount of market power,” says Rep. Darrell Issa (R-Calif.). “We’ve allowed there to be little choice in most areas.”

By the time the Comcast-TWC merger imploded, politicians and elected officials on both sides of the aisle were cheering. Attorney General Eric Holder, who stepped down from his post the same day Comcast walked away from the deal, declared, “The companies’ decision to abandon this deal is the best outcome for American consumers.”

Amid all the battles and rancor and hits to reputation above, the company amassed an enviable financial record, the kind other companies look to as a model. Over the past five years Comcast has more than doubled its operating profit (to $14.9 billion in 2014), nearly doubled its revenue (to $68.8 billion), and increased total shareholder return (up 278%) by more than twice the rate of the Nasdaq.

So why should it bother to change? The answer, surprisingly, has to do with those customers who used to have nowhere else to turn. While the options for broadband providers remain limited in many regions, there is an explosion of online content available at consumers’ fingertips.

And what consumers want, at least according to viewership trends, is to watch stuff online. Loads of it. Live TV viewing has decreased, and 40% of households now subscribe to an on-demand service such as Netflix and Amazon Prime. (The trend is evident in Comcast’s numbers: It lost 8,000 cable-TV subscribers last quarter.)

Comcast’s answer to the decline is X1, its Internet-connected platform that allows customers to view content on their television screens, laptops, and mobile devices. The company has issued 5 million X1 boxes to date and says 25% of its triple-play customers (subscribers to bundled Internet, TV, and phone service) now use the product. It has gradually added partners like Facebook and Nextdoor (a social network for neighborhoods), and recently announced integration with home automation services like Google’s Nest. But the long-term goal is to develop it into a far-reaching platform that also lets customers access online content from multiple sources—even Comcast’s competitors.

“I think ultimately you want to give the consumers the best experience,” says Neil Smit, CEO of Comcast’s cable communications division, which includes the company’s TV and broadband services. “So if the consumer wants to have access to Netflix or Hulu, then we should give them a simple way of doing that.”

It’s hard to imagine a day when Comcast offers an integrated Netflix app on its set-top box. But making nice with its enemies could be the best strategy as it tries to curtail its losses on the cable-TV side.

It’s not only Comcast that’s having to rethink its content strategy. The shift to online consumption is breaking the entire cable-TV model. Programmers, who have relied on traditional channel “bundles” (and the fees and ad dollars they generate) for decades, are also scrambling to come up with their own direct-to-consumer offerings while at the same time fighting the growing call for unbundling.

The growing alternatives for content consumption—both from Silicon Valley players and programmers like HBO and CBS—mean Comcast has to compete not only by developing equally compelling online services but also by keeping subscribers happy. Given its customer-service rap sheet, that’s no easy feat. “I can give you the coolest user interface in the world, but if you call and are put on hold, that’s detrimental to what we’re trying to do,” acknowledges Matt Strauss, executive vice president of Comcast’s video products.

Sources close to the company say it is serious about turning around its customer-service reputation—no, really this time. Although CEO Roberts has professed his commitment to improving Comcast’s image in the past, he now appears to be putting his money where his mouth is. The company has already earmarked $300 million toward overhauling its customer experience. In early May, Comcast announced that in addition to those already allocated funds, it would invest in new call centers and hire an additional 5,500 customer-service workers over the next few years. Other new initiatives include an Uber-like app that lets customers track and rate technicians, and a $20 credit when a technician is late or doesn’t show up. (This latter policy has actually been in existence for years, but most customers don’t know about it; Comcast says the credit will now be automatically applied to customers’ accounts when a technician is tardy.)

The company knows it needs more than Band-Aids. It also unveiled that all 84,000 of its employees—including senior management—would participate in customer experience training every year. Another internal shift: Its call service reps now use a new, homegrown tool called Einstein, a software system that gives them a more “holistic” view of a customer’s previous calls and complaints. (Because so many of Comcast’s customers have been inherited from other providers, the software that its customer-service workers used has long been a patchwork, making it even more challenging to quickly diagnose problems over the phone.)

All of these initiatives fall under the purview of longtime exec Charlie Herrin, the company’s newly appointed executive vice president of customer experience.

“Customer expectations are up there. They do have more choice, and they will vote with where the value and the services are,” Herrin, Comcast’s former head of product, tells Fortune. “It’s a massive challenge that’s changing rapidly every day. Whether it’s Uber or Zappos or whomever you want to point to, [the consumers’] expectations are being reset all the time.”

According to Herrin, Comcast has already cut down on late appointments by 29% over the past three months and has shown an 18% improvement in how quickly phone calls are answered. His team meets weekly with Smit to update them on progress. When the topic turns to his company’s high-profile customer-service fails, Herrin seems genuinely fazed: “My reaction is, that’s not us. It can’t be us. We can’t let that happen. I take it very personally.”

The company says it got serious about fixing its customer-service image before it ever thought of merging with TWC. Asked whether his customers’ criticisms had anything to do with the merger’s failure, Roberts had this to say at a press event during the big Chicago cable expo: “You would have to ask the decision-makers, but I think irrespective we have been on this journey for a while. Probably my own view, deep down, it didn’t. It wasn’t determinative.”

We’ll never know that for sure, of course. But if the company’s mean-girl rep wasn’t “determinative” in thwarting the merger, it has clearly become the target of Comcast’s top brass today—and this strategic refocusing for the cable giant may ultimately be more essential to its long-term success than a marriage with TWC ever would have been.

What may be the biggest irony in this case study in corporate relations is that Comcast’s legions of adversaries may have made the company that much stronger. The boys at Harvard will be studying this one for years.

Additional reporting by Tory Newmyer

This story is from the June 1, 2015 issue of Fortune magazine. It has been corrected from an earlier version to make clear that not all of Comcast’s lobbyists are employed full-time.

Customer complaints have plagued Comcast for years, but the issue came to a head in July when a customer recorded a call with a service representative who refused to let him disconnect his Comcast service. The recording not only went viral but also motivated other frustrated Comcast customers to do the same.

At an event in San Francisco, Roberts said that he was “embarrassed” and “disappointed” when he heard the recording. “It was a teachable moment for employees and it was a teachable moment for all of us,” he said.

After the incident became public, Roberts appointed Charlie Herrin senior vice president of customer experience. Herrin, who previously oversaw the design of Comcast’s Xfinity products, faces the daunting task of improving Comcast’s overall customer experience.

Still, the Comcast CEO maintained that such customer service nightmares are not the norm. “We get 250 million phone calls a year,” he said. “The nature of our business is that we’re going to have these things.”

Roberts also tackled net neutrality, the concept that Internet service providers treat all web content equally in terms of speed. It’s a heated issue pitting consumer activists, who argue against companies paying for preferential treatment online, against telecom companies.

On Monday, President Barack Obama made waves when he introduced a 1,000-word plan to ensure a free and open Internet. Specifically, President Obama called for the Federal Communications Commission, or FCC, to act on a set of rules from the 1996 Telecommunications Act that would prevent Internet providers from blocking or slowing lawful web content. Earlier this year, the Supreme Court struck down the FCC’s rules, which upheld net neutrality.

Just a day after President Obama’s introduced his net neutrality plan, Comcast leapt into the fray by releasing a statement claiming it “agrees with the President’s principles on net neutrality” and that Internet content should not be blocked or slowed. However, Comcast disagreed with President Obama’s calls for Internet providers to be regulated like utilities.

“There’s a better way to do that,” said Roberts said, who argued that Internet providers should keep their current largely unregulated status.

The battle over net neutrality is far from over. The FCC has yet to respond to President Obama’s proposal, although FCC Chairman Tom Wheeler has said he is open to the plan. And net neutrality supporters have public rallies planned.

Meanwhile, Robert emphasized that Comcast will cooperate with the government to find a common ground. “No blocking, and no discrimination — consumers need the certainty that this platform [the Internet] stands for those kinds of principles,” he said.

AT&T to pause fiber spending on net neutrality uncertainty

(Reuters) – AT&T Inc on Wednesday raised pressure on the U.S. telecommunications regulator’s work on new “net neutrality” rules, saying it would stop investing in high-speed Internet connections in 100 cities until the Web rules were settled.

The statement from AT&T Chief Executive Officer Randall Stephenson is the first move by an Internet service provider in response to President Barack Obama’s unexpected call on the Federal Communications Commission on Monday to regulate these companies more like public utilities.

AT&T has been spending heavily on acquisitions and the statement came only days after it cut its capital spending estimate for 2015.

“We can’t go out and invest that kind of money deploying fiber to 100 cities not knowing under what rules those investments will be governed,” Stephenson said at an analyst conference.

In April, AT&T said it would deploy its high-speed fiber network in 100 cities, including Chicago, Los Angeles and Miami.

Ensuring access to quality Internet for all Americans has been the FCC’s major focus. The White House detailed Obama’s plan in a blog post on Monday, saying that, if implemented, it “shouldn’t create any new burden for Internet providers.”

Telecom companies plan to fight Obama’s call for utility-style regulations in Congress and the courts.

More than three dozen congressional Republicans wrote to FCC Chairman Tom Wheeler on Wednesday that Obama’s proposed changes were “beyond the scope of the FCC’s authority.”

Comcast Corp, now closing a merger deal with Time Warner Cable Inc that would create the nation’s top cable Internet service provider, said on Wednesday the net-neutrality uncertainty would chill investment in Web infrastructure.

“The (regulatory) insecurity creates investment insecurity,” Comcast CEO Brian Roberts told reporters in San Francisco. “We will spend $20 billion in capital spending if you include Time Warner Cable. We want to have open internet rules, but don’t want to discourage investment.”

AT&T, whose $48.5 billion bid for DirecTV is under government review, said on Friday it would also pay $1.7 billion to acquire Mexican wireless operator Iusacell. It trimmed its 2015 capital spending outlook to $18 billion from $21 billion.

At the same conference on Wednesday, Verizon Communications Inc CFO Fran Shammo struck a more restrained tone. She said the FCC could restrict “paid prioritization” deals, where content companies pay for faster downloads of some websites or applications, without pursuing utility-style regulations.

“I think the independent agency of the FCC will make the right decision,” Shammo added.

Comcast is trying to fix its customer service problems (again)

After years of customer service complaints, Comcast said Friday it is appointing a new executive to fix the problem.

In general, cable companies have a pretty terrible reputation for customer service, and almost any subscriber can readily supply a personal tale of misery. Technicians routinely fail to show up when they’re supposed to. Callers are put on perpetual hold. Service gets cut off without any warning or apparent concern.

Now, Comcast is taking action – allegedly. Neil Smit, CEO of Comcast Cable, said the division has named Charlie Herrin as its senior vice president of “customer experience.” Herrin, who was previously worked in product design and development, is being asked to “reimagine the customer experience and ensure that we are delighting our customers at each touch point,” Smit wrote in a blog post.

This year, Comcast CMCSA has managed to stand out for bad service by failing to live up to the already low expectations of its customers. In one case, a customer recorded a Comcast representative refusing to allow him to disconnect his service. The recording went viral this summer and, in turn, prompted others to record their own agonizingly frustrating interactions on the phone.

More recently, Comcast reportedly hit a Chicago customer with a $1,000 early termination fee when he canceled his frequently malfunctioning service. After unflattering headlines, the company ultimately resolved the problem.

Comcast executives, over the years, have repeatedly apologized for the company’s customer service. Following the viral telephone recording this summer, Tom Karinshak, Comcast senior vice president of customer service, issued a statement saying the company was “very embarrassed” and that executives would reach out personally to the customer in question.

“While the overwhelming majority of our employees work very hard to do the right thing every day, we are using this very unfortunate experience to reinforce how important it is to always treat our customers with the utmost respect,” Karinshak said at the time.

Both Karinshak and Herrin now have senior vice president titles involving customer service. How they’ll divvy up the duties wasn’t made clear.

Earlier this year, Smit echoed his predecessors by calling improved customer service “a top priority,” which he reiterated in his post on Friday. That’s a different tune from what Smit’s boss, Comcast CEO Brian Roberts, had to say about the company’s poor reputation for customer service. Last year, Roberts said that the high number of complaints was a byproduct of having hundreds of millions of interactions with customers.

“You get one-tenth of one-percent bad experience, that’s a lot of people – unacceptable,” Roberts told Marketplace “We have to be the best service provider or in the end, this company won’t be what I want it to be.”

Of course, Comcast has had plenty of time and resources to figure out its customer service woes. The Philadelphia-based company has been around for five decades and it ranks 44th on the Fortune 500 with almost $65 billion in annual revenue. What’s more, Comcast will only have more customers to interact with in the near future should the company’s planned $45 billion takeover of Time Warner Cable receive government approval. If that deal goes through, then Comcast would control almost 30% of the pay TV market.